The big Canadian public-sector pension plans known as the ‘Maple Eight’ have achieved impressive results scouring the world for attractive investments.
But in doing so, they have largely bypassed equity investments in Canada, to the dismay of those who would like to see more of their $2.4 trillion in assets put to work benefitting the domestic economy.
Now, with increasing risks from investing abroad and emerging opportunities for new infrastructure investments at home, the Maple Eight are starting to embrace more of an “invest in Canada†approach.
“I think the pieces are in place for a significant shift,†says Keith Ambachtsheer, director emeritus of the International Centre for Pension Management. “In the right context, the major plans are more than happy to do this stuff at home.â€
Currently, the Maple Eight in combination invest about 25 per cent of their assets in Canada, according to tabulations by Letko Brosseau & Associates.
Of that total, 15 per cent is invested in Canadian fixed income. Only about 10 per cent of assets are in Canadian public and private equity-type investments, versus 58 per cent in comparable foreign investments, according to Letko Brosseau figures.
Retirees looking for investment income in Canadian dollars to fund spending needs in Canada is
The Maple Eight are considered to be among the world’s top pension investors. They invest assets for the Canada Pension Plan, the Quebec Pension Plan, as well as public employee pensions at the federal, provincial and local levels. They include (in declining order of asset size): the Canada Pension Plan Investment Board (CPP Investments); La Caisse de dépôt et placement du Québec (La Caisse); the Public Sector Pension Investment Board (PSP Investments); Ontario Teachers’ Pension Plan Board (Ontario Teachers’); British Columbia Investment Management Corporation (BCI); Alberta Investment Management Corporation (AIMCo); Ontario Municipal Employees’ Retirement System (OMERS); and the Healthcare of Ontario Pension Plan (HOOPP).
The Maple Eight generally follow similar strategies and have gradually reduced the proportion of assets in conventional bonds and publicly-listed stocks, while investing larger shares in private credit and equity-type private assets including infrastructure, direct real estate, and private equity.
That approach has helped them generate strong, reliable long-term cashflows that are especially suited for paying pensions.
The “Canadian pension model†is highly regarded around the world. “The people out there (in foreign pension plans) are envious that we’ve been able to do this,†says Ambachtsheer.
Several studies show that the “large Canadian pension funds outperform their global peers in terms of their investment performance and hedging against liability risks,†concludes a 2024 paper by Ambachtsheer and co-authors Sebastien Betermier and Chris Flynn.
But the Maple Eight’s lack of equity-type investments in Canada has long been a sore spot with many.
In March 2024, a group of business leaders wrote an open letter to federal and provincial governments calling on them to change pension plan rules to encourage greater Canadian investment.
“We’ve tried to raise the alarm that the very small amount invested in Canada in equity-type investments of 10 per cent is too low,†says Peter Letko, co-founder of Letko Brosseau and one of the organizers behind the letter. “And this is really hurting the economy.â€
Letko contends the Maple Eight could add significantly more Canadian equity to their portfolios while staying amply diversified and maintaining strong returns. “Canada is wonderful place to invest,†says Letko. “There are plenty of first-class businesses that have a long history of success.â€
While governments are reluctant to encroach on the Maple Eight’s storied independence to force more Canadian content, new risks and opportunities are leading the Maple Eight voluntarily in that direction.
The U.S. has long been the top investing destination for many plans, with some investing well over 40 per cent of their assets there. But under U.S. President Donald Trump’s tariffs, America has a diminishing reputation as a reliable investment destination. Among other threats, U.S. lawmakers were considering new taxes on foreign investments as part of Trump’s “One Big Beautiful Bill.â€
Canadian government pensions, writes David Aston, come with a decision that isn’t always easy to
Another favoured Maple Eight investment location is China. According to Letko Brosseau, the Maple Eight have invested more in China than in Canadian equity-type investments. If current tensions over Taiwan escalate, China could impose restrictions on foreign investors taking money out of the country.
Meanwhile, investment opportunities are emerging in Canada. Prime Minister Mark Carney’s new government is focused on creating more domestic investment opportunities of a kind these pension plans crave — large infrastructure investments that could generate reliable, long-term cash flows.
The Maple Eight’s rekindled interest in Canadian investing is reflected in recent executive comments.
Deborah Orida, CEO of PSP Investments, recently extolled the “home-ice advantage†of Canadian investments, as reported in the Financial Post. “We are asking (ourselves) whether there’s opportunities to leverage our global capabilities in areas like infrastructure here at home.â€
CPP Investments CEO John Graham was recently quoted in the Globe and Mail: “for domestic investors, Canada’s becoming just a little bit more attractive.â€
CPP Investments also signalled new openness to Canadian oil and gas and pipeline investments. Graham was quoted in the Financial Post: “We’re really keen on conventional energy, oil and gas, renewables.â€
A major impediment to greater Maple Eight investments in Canada has been the lack of investment opportunities of the right kind. The Maple Eight like infrastructure investments in mature “strategic assets†that generate reliable cashflows: airports, seaports, railways, toll highways and bridges, utilities, and electrical transmission grids. In Canada, these assets are largely under public ownership and not for sale.
The Trudeau government had courted Canadian pension plans for investments in riskier early-stage infrastructure projects, but the Maple Eight mostly weren’t interested. “That’s not their sweet spot,†explains Ambachtsheer. “They’re in the business of visible cash flows down the road. That’s what pays pensions.â€
Prime Minister Mark Carney’s new government has made a priority of building many of the types of infrastructure that should appeal to Maple Eight investors.
While these projects are still mostly just concepts, the Carney government has ambitious plans and will need lots of capital. The Maple Eight will likely be cautious about investing in the risky early stages, but should be keen for operating assets that are proven cash generators.
In addition, governments could sell partial equity interests in existing infrastructure like airports and seaports to generate capital for redeployment or paying down the burgeoning public debt.
Carney and some of his team have strong financial backgrounds that should help get deals done.
Carney himself is former board chair of Brookfield Asset Management, a global asset manager known for investing in many of the same kinds of assets as the Maple Eight.
Michael Sabia, incoming clerk of the Privy Council (head of the federal public service), is a former CEO of one of the Maple Eight, La Caisse, as well as former CEO of Hydro-Quebec.
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